A petition demanding pension and investment cold calling be made illegal has won the support of two former Pensions Ministers and a growing band of industry supporters.

More than 3,500 people, including Ros Altmann and Steve Webb, are backing the initiative to help stop unregulated firms and scammers tricking savers into putting money in high-risk or fraudulent investment schemes.

The petition, launched by Derbyshire-based financial adviser Darren Cooke, says: 'Banning cold calling would dramatically reduce the number of people falling prey to fraudsters and losing their savings and pensions.'

Building support: If the petition attracts 10,000 signatures, the Government will have to issue a response to it, and at 100,000 it will be considered for debate in Parliament

An outright ban on these types of calls would also do away with any ambiguity - someone receiving a call out of the blue would know for sure that it was illegal and to be very wary.

Cooke, director of Red Circle Financial Planning in South Normanton, told This is Money he hoped to 'cut off the food source' of fraudsters.

'For scammers, cold calling is their main way of contacting individuals. They will find a way round it. I have no illusions. But it might stop pension scammers in their tracks. It might help.'

RELATED ARTICLES

Share this article

Share

Cooke said imposing sanctions was up to legislators and regulators, but suggested fines and jail time as potential punishments for flouting what he believes should be a blanket ban on calls and emails about pension and investment opportunities.

'I struggle to think of any exceptions. I don't know any financial advisers who cold call. I don't think good, honest financial advisers use cold calls. If you don't make it a blanket ban you leave chinks the scammers can get through.'

While viewing the programme, he was angered to realise there was a link between those firms and one he had reported to the Financial Conduct Authority two and a half years before.

If his petition attracts 10,000 signatures, the Government will have to issue a response , and if it hits 100,000 signatures it will be considered for debate in Parliament.

Pension freedom reforms introduced in April 2015 now allow over-55s to access their entire retirement savings pots, making this money an obvious target for unscrupulous sharks.

Fraud experts say that a combination of new rules, investors looking for returns and pensioners withdrawing large sums of cash have created a potentially fertile hunting ground for conmen, but it is hard to estimate just how much has been lost.

Lady Altmann, who served as pensions minister under David Cameron, and tweeted in support of Cooke's petition (see below), revealed last week that she was repeatedly blocked by officials when she tried to take action against cold-calling by scammers defrauding pensioners out of their life savings.

Please get as many people as you can to sign this petition to ban pension cold calling https://t.co/Zt2b4sd9I3 Pension scams ruin lives

Top financial services firm Hargreaves Lansdown has also thrown its weight behind the campaign. Head of retirement policy Tom McPhail said: 'Investment fraud can be devastating for individuals, particularly when it is targeted at retired pension investors and cold calling is one of the fraudsters’ most common tactics.

Poll

Should making cold calls about pensions and investments be illegal?

Yes

No

Should making cold calls about pensions and investments be illegal?

Yes38 votes

No11 votes

Now share your opinion

'It is important however to acknowledge that regulated businesses also need to be able to contact individuals for a variety of legitimate reasons, for example in relation to a workplace pension, or a beneficiary of a will or a trust, or simply for market research, and this would have to be reflected in the wording of any ban.

'Ultimately this campaign will need to be clear about exactly what it wants to ask policymakers to do; in the meantime it is great that efforts are being made to put this issue on the agenda.'

Andrew Tully, pensions technical director at Retirement Advantage, said his firm supported the pension scam petition and encouraged everyone to sign and force the Government to formally respond.

‘Investment cold-calling is a modern day scourge as reported pension fraud losses are in the millions. We must do more to help and protect people approached by conmen, which is why getting behind this petition is so important.’

Tully said research carried out by his firm earlier this year found 35 per cent of people aged 55 or over had been targeted by a potential pension scammer, offering free pensions advice or investment opportunities by phone, text or email. Retirement Advantage offers tips to detect scams below.

A Government spokesperson said: 'We are determined to tackle the scourge of nuisance calls especially those of a fraudulent nature. We take the issue of pension scams, and the targeting of vulnerable people through cold calls, very seriously and are currently considering ways to protect consumers from pension scammers.'

It has established a joint taskforce, Project Bloom, to co-ordinate action to tackle scams which encompasses the National Crime Agency, police forces, Pension Wise, regulators and key Government departments.

Asked about the case raised by Cooke above, the FCA said it did not comment on individual firms. It also declined to comment on the petition. However, it pointed to its ScamSmart initiative launched last year and stressed its ongoing efforts to collate, analyse and act on information to help stamp out fraud.

HOW TO DETECT A PENSION SCAM

Retirement Advantage highlighted five tell-tale signs that should put you on the alert.

1) An offer to help you access your pension savings before age 55.

'It is only possible to do this in rare situations, for instance if you are very ill, so be careful and always check with your pension provider.'

2) A recommendation to take a large amount of money, or your whole pension pot, in a lump sum and invest it.

'There are significant tax implications if you take lots of your savings in one go, so check the tax position before you make any decisions.'

3) Warnings that the deal is limited and you must act now.

'Choosing the right retirement income product is a big decision and shouldn’t be done quickly or under pressure.'

4) Discouragement from seeking professional financial advice or talking to Pension Wise or The Pensions Advisory Service.

'An adviser would be able to explain the rules and tax implications of different options and help you make the best choices for your personal circumstances, so be very suspicious if this is discouraged.'